Yet no matter what they offered, the guidelines remain vaguely defined and open to broad interpretation. It makes the deal subject to any number of biases and political motivations.

Ottawa, which said Thursday it will extend its review by another 30 days to mid-November, will test China’s largest foreign offer to date against a short list of hurdles to determine whether it is as good for Canada as it is for China.

And CNOOC may not even have to satisfy all of them.

“You don’t have to demonstrate a net benefit in each one of them,” said Doug New, Toronto-based partner with Fasken Martineau LLP who previously served with the Canadian Foreign Investment Review Agency.

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“A neutral finding in four of them, and pluses in two of them could get you approval,” he said. “There are even some transactions where one of the factors would be a negative, but the benefits in the other factors could outweigh it. It is a scale, I am not quite sure how the scale works, but when it tips the right way, you get an approval.”

Here’s what Canadian law requires, and what the Chinese state-owned oil and gas company has promised to do. The question is whether Ottawa will take CNOOC at its word.

• CNOOC will have to invest in Canada, maintain Canadian jobs and contribute to the country’s economic growth. It also has to maintain a high level of Canadian participation in its Canadian subsidiary. CNOOC has committed to retain all Canadian employees, including Nexen’s senior management group. What’s uncertain is how many will stay, and how many will be replaced by its China-based staff. Canadians will have 25% of Nexen’s board under CNOOC’s ownership.

• CNOOC will have to contribute technology and research and development. While this is seen as a focal point in the review process, CNOOC, which has lots of expertise in offshore drilling, has made it clear they are here to learn Canadian technology in areas such as the oil sands and shale gas, rather than contribute to its development.

• The takeover cannot lessen competition within the oil and gas industry or in Canada’s economy. CNOOC’s takeover is not likely, on its own, to have a big impact on competition in the Canadian oil and gas sector. But there is a bigger picture: China is investing in Canada through its three state-controlled companies — CNOOC, PetroChina and Sinopec. Combined, Chinese investments could hamper competition in areas such as wages, as companies such as PetroChina, with nearly two million employees, use their own workers to manage and build energy projects. The Chinese companies could also build more parts of Canadian projects in China, impacting Canadian engineering, procurement and construction companies as well as the quality of Canadian infrastructure, potentially bringing environmental and safety concerns to the forefront.

• CNOOC must adapt to Canada’s business culture and participate in Canada’s tradition of corporate social responsibility. This is a highly subjective area. Once it owns Nexen, CNOOC will introduce its own culture and practices, much as other foreign companies operating in Canada have done. CNOOC is committed to maintain Nexen’s Canadian brand and fund its community investment programs. This requires a level of trust as commitments are usually short term and can be quietly discontinued.

• The final requirement under the law is that CNOOC must help Canada compete in world markets. This is the strongest point in CNOOC’s favour, because the transaction would tighten Canada’s relation with the superpower and help open a new market for Canadian oil.

CNOOC also needs to pass guidelines applying exclusively to state-owned enterprises. An amendment in 2009 brought national security concerns into the review process as more SOEs started buying into Canadian natural resources.

“This is dealt with in secret and it is dealt with in confidence,” Mr. New said. “Parliament purposefully did not define what injurious to national security meant. Who the acquirer is and what the target does are the two principal factors, we know that, what combination of sensitivies will cause the government to act is the unknown.”

Ottawa will look at the extent to which CNOOC is owned by the Communist state and whether it has commercial rather than political goals.

This is CNOOC’s potential Achilles heel. While it claims to operate like any commercial entity that sells its oil in world markets, it works for the government of China. Its holding company is 100% owned by the state and only 36% of its subsidiary is publicly traded in Hong Kong and New York. CNOOC has promised to list those shares in Toronto and with a market value of $80-billion, it would become the largest listing in Canada’s main exchange.

CNOOC will also have to demonstrate that it adheres to Western standards of disclosure and transparency. CNOOC has already adopted some practices, including holding analyst calls and answering media questions, but it’s clearly still learning.

“The takeaway from this whole process is that the government needs to be a lot more specific in the legislation here,” said Ed Tapuska, Calgary-based partner with Borden Ladner Gervais LLP. “I kind of feel a bit for CNOOC. They’ve spent millions of dollars in professional fees … and it could all end up being for naught. People, and the Chinese in particular, they don’t forget that.”